Chinese Themselves on the PRC: 'Why China Works'

♠ Posted by Emmanuel in , at 5/16/2014 02:00:00 AM
Replicating Pearl River Deltas all over the nation?
Many Westerners have tried capturing China's secrets of success from the outside looking in. Joshua Cooper Ramo famously coined the "Beijing Consensus" to denote China's state-directed counterpart to the American prescription for economic success which is a fairly straightforward application of the neoliberal ideal of unshackling markets to do their magic. Aside from not reflecting what's really happening in China--does anyone consider China  a model of sustainability and equality--the Beijing Consensus has become shorthand for what China merely does as opposed to what it advocates. Scott Kennedy ultimately concludes that there is no such thing as a Beijing Consensus since it gets the facts wrong about China and it distorts actual PRC policies.

I was therefore chuffed to see a genuine homegrown effort to define the parameters of Chinese development in the pages of the People's Daily. The advantage of reading an official publication is that you are in no doubt as to whether it imparts the spin intended by the government in question. You can be sure the material has been vetted. In this case, Zhang Weiwei, Director of the Centre for China Development Model Research, Fudan University in Shanghai, offers probably as close to the official version of China's success as you are likely to get for international consumption. According to him (all emphasis is in the article):

The following five aspects of China's political governance merit special attention:

[1] First, one-party governance...The Communist Party of China has to a great extent followed this tradition and built an impressive system of selecting its leaders based on merit and performance. For instance, its top decision-makers (6 out of 7 Politburo's Standing Committee members) all worked at least twice as much as party secretaries or governors at the provincial level, which means they have on average administered a population of about 100 million before being promoted to their current positions in Beijing.

In this context, the word "party" may be a misnomer for the CPC, as it bears no similarity with the type of political institutions like the Republican or Democratic parties of the U.S., which openly represent group interests of a society and compete with each other. The CPC has tried, in China's own political tradition, to represent the interests of the overwhelming majority of people, who apparently accept this, at least up to now, thanks largely to the fact that most people have found their living standards significantly improved over the past three decades.

In this sense, the CPC should better be viewed as a state party or, in a hypothetical American context, a merge of the Republican and Democratic parties in which competition of ideas and competence is the norm and consensus and can-do spirit is prized. 

[2] Second, neo-democratic centralism. China's success is inseparable from its much reformed decision-making process, which can be described as neo-democratic centralism or a modern form of democratic centralism. The old Soviet-style decision-making process was indeed more about centralism than democracy, but China has improved on it and institutionalized a procedural accountability for its democratic centralism. Under such a system, a typical major decision like the nation's five-year plan for development takes well over a year of extensive and interactive consultations at various levels of the Chinese state and the society, with several cycles of "from the people to the people, and to the people from the people".

As a result, the final decision reflects the broad consensus of Chinese society on many issues such as public health reform, adjustment of the one child policy, deferred retirement age, banking sector reform, education reform and the end of the "reform through labor" system. Many decisions are made based on the results of pilot projects.

With a higher degree of legitimacy in the decision-making process, there is usually no need to "sell" the state's decisions, as the United States does, to the public. Once decisions are made in Beijing after such a process, they are usually ready for "study and execution" or to be further tested in various pilot projects...

[3] Third, demand creation. Cycles of institutionalized consultations and policy debates in major decision-making processes tend to generate, at regular intervals, a lot of public expectations, usually more positive than negative, for economic development. Such expectations in turn create new and often medium to long term demand. A typical five-year plan in China catches the attention of the vast part of the Chinese society, from private firms to state-owned enterprises to individual shareholders. The fact that China has been able to sustain an annual GDP growth rate of over 9 percent for over three decades is inseparable from these regular and predictable cycles of expectation and demand creation.

"The fact that China has been able to sustain an annual GDP growth rate of over 9 percent for over three decades is inseparable from these regular and predictable cycles of expectation and demand creation. "

[4] Fourth, development administration. It's not far from wrong to claim that China has created its own model of development, an important feature of which can be called "development adminstration," in contrast to public administration. China's five-year national plans and CPC's annual economic conference are definitely part of China's development administration. The same is true with many local development strategies and plans. Chinese universities may eventually offer courses and even degrees in development administration just as degrees in public administration are common everywhere.

But the Chinese case may be unique, as the Chinese state, under the "socialist market economy," commands not only such Keynesian instruments as fiscal and monetary policies, but also other "tools," which may not be available in other countries, such as public ownership of land and of strategic resources as well as a largely performing state sector. These "tools" give the Chinese state greater leveraging power.

[5] Fifth, minyi versus minxin. Behind all the above is the Chinese philosophy of governance, including, inter alia, the two distinctive concepts: minyi and minxin, the former referring to "public opinion", and the latter to "the hearts and minds of the people" (approximate English translation), which was first put forward by Mencius (372 - 289 BC). Minyi or public opinion can be fleeting and change overnight, while minxin or "hearts and minds of the people" tends to be stable and lasting, reflecting the whole and long-term interest of a nation. Over the past three decades, even under the occasionally populist pressure of minyi, the Chinese state has still generally practiced "rule by minxin". This allows China to plan for medium to long terms and even for the next generation, rather than for next 100 days or next election as in many Western countries.

[Me again. Zhang even concludes by pointing out that China faces a series of difficulties. Yet, these do not mean Chinese governance is better than is has been in the last few centuries according to him:]

China is still faced with many daunting challenges ranging from corruption to regional income gaps and environmental degradation. But China is indeed better than at anytime in its modern history. The country is now the world's largest laboratory for economic, social and political experimentation. There is a every reason to believe that China, which has a continuously adaptive political system, will reach its objective of becoming the world's largest economy in a decade's time -- with all the implications for China itself and for the rest of the world at large.
[At CEIBS, China's top business school, Zhang Weiwei also served up an eight-point "China Model":]

Prof. Zhang then gave a summary of the China Model’s eight distinctive features. It:
- Is based on practical reasoning;
- Has a strong and relatively neutral government;
- Prioritizes stability;
- Focuses on people’s livelihood;
- Is based on gradual reform;
- Has correct priorities and sequences;
- Has a mixed economy;
- Is open to the outside world.